Skills shortage sees salary growth hit 17 year high

Skills shortages are becoming a threat to economic growthLuke MacGregor/Reuters

Starting salaries are rising at the fastest pace in at least 17 years as a growing skills shortage has forced employers into a bidding war for full-time workers.

Availability of permanent staff fell at the fastest rate on record last month, with persistent shortages now emerging in IT and engineering that are “becoming a serious threat to economic growth”, according to a monthly jobs survey by KPMG and the Recruitment and Employment Confederation.

The skills shortage has come just as demand for staff is growing. As a result, “amid reports of a short supply of suitable candidates, permanent [starting] salaries rose during June at a survey record rate”. Even temporary staff pay rates rose at the fastest pace in almost seven years.